Baowu Magnesium Technology Co., Ltd.'s (SZSE:002182) last week's 6.4% decline must have disappointed retail investors who have a significant stake

Key Insights

• Baowu Magnesium Technology's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 23 shareholders
• Insiders own 17% of Baowu Magnesium Technology

If you want to know who really controls Baowu Magnesium Technology Co., Ltd. (SZSE:002182), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, retail investors endured the biggest losses as the stock fell by 6.4%.

Let's delve deeper into each type of owner of Baowu Magnesium Technology, beginning with the chart below.

See our latest analysis for Baowu Magnesium Technology

What Does The Institutional Ownership Tell Us About Baowu Magnesium Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Baowu Magnesium Technology. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Baowu Magnesium Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Baowu Magnesium Technology. China Baowu Steel Group Co.,Ltd is currently the largest shareholder, with 22% of shares outstanding. Xiaoming Mei is the second largest shareholder owning 16% of common stock, and GF Fund Management Co., Ltd. holds about 2.8% of the company stock. Xiaoming Mei, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 23 shareholders, meaning that no single shareholder has a majority interest in the ownership.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Baowu Magnesium Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Baowu Magnesium Technology Co., Ltd.. Insiders own CN¥1.8b worth of shares in the CN¥10b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 50% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 22%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Baowu Magnesium Technology better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Baowu Magnesium Technology (including 2 which are concerning) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.